Senator Orrin Hatch, R-Utah, well known for his work on
pension and retirement issues, introduced a joint resolution in the Senate
aimed at dialing back Department of Labor (DOL) rules adopted under former
President Barack Obama, which encourage states to set up defined contribution (DC)
payroll deduction retirement plans for private sector workers.
It was only last August that the “old” Department of Labor
its final ruling on state-run individual retirement accounts (IRA)s. The
new rule was designed to assist states that are planning to or have already
enacted laws requiring employers that do not offer workplace savings
arrangements to automatically enroll their employees in payroll deduction IRAs
administered by the states. It also applies to states that have enacted laws
creating a marketplace of retirement savings options geared at employers that
do not offer workplace plans.
Important to note, the entirety of the joint resolution could
fit in two tweets and simply states that “Congress disapproves the rule
submitted by the Department of Labor relating to Savings Arrangements Established
by Qualified State Political Subdivisions for Non-Governmental Employees, and
such rule shall have no force or effect.” The resolution language does not speak whatsoever to any effort to actually get the rulemaking off the books.
As such, it seems the Congress is more interested in dialing
back the federal government’s active encouragement of states to create retirement
plans to aide private sector workers whose employers do not offer savings
opportunities—rather than somehow actually prohibiting individual states from creating their
own retirement savings marketplaces, should they so desire. In this way the
resolution may not end up having such a dramatic effect, but like a lot of other
regulatory activity in Washington, this will take some time to fully play
The resolution probably is not surprising to readers: When the Obama-era DOL first put out the rulemaking there
was some significant criticism, but many retirement industry professionals and
observers viewed the rules at least somewhat positively, based on the
fact that there is clear evidence that simply permitting an individual to save
via payroll deductions can be a major boon to their retirement outlook. Still,
the Republicans in Congress remain eager to overturn and reverse whatever Obama-driven
regulations they possibly can.
Similar language has already been introduced in the House:
In early February Representative Tim Walberg, R-Michigan, chairman of the U.S.
House Subcommittee on Health, Employment, Labor, and Pensions, and
Representative Francis Rooney, R-Florida, introduced
two resolutions of disapproval to block the same regulations.